ACE Crude Oil - March 22, 2020

Below is an illustration trading futures options on Crude Oil.  Our post shows bullish and bearish positions using a combination of call and put options.


Trade Options on Futures

Crude Oil * Directional & Neutral Positions

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Term Structure

CL term


Volatility

Options fall into the category of being slightly overvalued in volatile markets in the weekly options report. Ask about the Weekly Option's Report for more information.

CL optV


Notes:

Contract Size - 1,000 barrels.

Tick Size:  Outright: dollars and cents with 0.01 points=$10

Trading Hours: CME Globex: Sunday - Friday 6:00 p.m. - 5:00 p.m. Eastern Time (CST).

* Tip: Click here to read a helpful tip about Crude Oil futures and options


Charts

Prices have fallen significantly.

WTI down 10% historic low with a substantial move lower hinging whether Russia with OPEC would cut production. They aren't going along with production cuts so much uncertainty which was a drop on oil prices. Levels are back to 2016 levels. Lots of volume in the April contract.. 

CL weekly

CL daily

* Tip: Click here on enlarging images


Strategies

Below illustrates a directional play to the upside using a call vertical swap. Alternatively, beneath is bearish.

The % yield shown in the diagrams below represent an estimated return on margin from projected dates shown below. The structure has positive time decay which is an advantage over holding outright options.

Vertical Swap Bullish

cl vswap

Vertical Swap Bearish

cl vswap bear2

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